economics: capitalism

Erik Kojola on June 5, 2017

With a group of coal miners standing behind him, President Donald Trump signed an executive order in his first 100 days reversing Obama-era climate change policies, claiming that he would bring back coal while putting miners to work. Yet, can or will coal mining jobs come back, and will this lead to economic and social development in places like Appalachia?

Probably not.

Much research has shown that the loss of mining jobs in the U.S. is largely due to mechanization and labor-cutting management practices — not environmental protections. Thus, placing the blame on climate change policies is unfounded. Instead, it’s used to scapegoat environmentalists and draw our attention away from corporations and changes in the global economy.

Even if Trump’s executive order could bring back the jobs, it might not have the effects coal miners are hoping for. Researchers find that mining does not always lead to economic growth and well-being. Thus, keeping coal mines open does not guarantee economic prosperity and well-being. A study found that in West Virginia the counties with coal mines have some of the highest poverty and unemployment rates compared to surrounding counties without active mines.

Moreover, sociologist William Freudenberg argues that economies based solely around mining are prone to booms and busts, subject to the whims of the industry. Towns in Appalachian coal country and the Bakken oil fields of North Dakota become “addicted” to extraction. But dependence on fossil fuel industries is economically precarious.

Why don’t these facts change miners’ deep ties to mining as a way of life? Because many have strong cultural connections to mining, often coming from multiple generations of miners. Through her experiences working in a coal mine, anthropologist Jessica Smith Roylston saw how the miner identity connects with masculine ideals of hard work and providing for one’s family.

Industry has tapped into these sentiments to generate public support and weave the industry into the fabric of community life. Mining companies, particularly in Appalachia, have actively worked to create a positive image through public relations and other cultural and political tactics, such as sponsoring high school football tournaments and billboard ads.

These corporate strategies place the blame on outsiders and environmentalists, provide a cover for environmentally destructive and job-cutting industry practices, and keep coal politically relevant.

Erik Kojola is a PhD student in the Department of Sociology at the University of Minnesota interested in the environment, labor, social movements and political economy.

Sometimes you have to take the long view.

This week Bill O’Reilly — arguably the most powerful political commentator in America — was let go from his position at Fox News. The dismissal came grudgingly. News broke that he and Fox had paid out $13 million dollars to women claiming O’Reilly sexually harassed them; Fox didn’t budge. They renewed his contract. There was outcry and protests. The company yawned. But when advertisers started dropping The O’Reilly Factor, they caved. O’Reilly is gone.

Fox clearly didn’t care about women — not “women” in the abstract, nor the women who worked at their company — but they did care about their bottom line. And so did the companies buying advertising space, who decided that it was bad PR to prop up a known sexual harasser. Perhaps the decision-makers at those companies also thought it was the right thing to do. Who knows.

Is this progress?

Donald Trump is on record gleefully explaining that being a celebrity gives him the ability to get away with sexual battery. That’s a crime, defined as unwanted contact with an “intimate part of the body” that is done to sexually arouse, gratify, or abuse. He’s president anyway.

And O’Reilly? He walked away with $25 million in severance, twice what all of his victims together have received in hush money. Fox gaves Roger Ailes much more to go away: $40 million. Also ousted after multiple allegations of sexual harassment, his going away present was also twice what the women he had harassed received.

Man, sexism really does pay.

But they’re gone. Ailes and O’Reilly are gone. Trump is President but Billy Bush, the Today host who cackled when Trump said “grab ’em by the pussy,” was fired, too. Bill Cosby finally had some comeuppance after decades of sexual abuse and rape. At the very least, his reputation is destroyed. Maybe these “victories” — for women, for feminists, for equality, for human decency — were driven purely by greed. And arguably, for all intents and purposes, the men are getting away with it. Trump, Ailes, O’Reilly, Bush, and Cosby are all doing fine. Nobody’s in jail; everybody’s rich beyond belief.

But we know what they did.

Until at least the 1960s, sexual harassment — along with domestic violence, stalking, sexual assault, and rape — went largely unregulated, unnoticed, and unnamed. There was no language to even talk about what women experienced in the workplace. Certainly no outrage, no ruined reputations, no dismissals, and no severance packages. The phrase “sexual harassment” didn’t exist.

In 1964, with the passage of the Civil Rights Act, it became illegal to discriminate against women at work, but only because the politicians who opposed the bill thought adding sex to race, ethnicity, national origin, and religion would certainly tank it. That’s how ridiculous the idea of women’s rights was at the time. But that was then. Today almost no one thinks women shouldn’t have equal rights at work.

What has happened at Fox News, in Bill Cosby’s hotel rooms, in the Access Hollywood bus, and on election day is proof that sexism is alive and well. But it’s not as healthy as it once was. Thanks to hard work by activists, politicians, and citizens, things are getting better. Progress is usually incremental. It requires endurance. Change is slow. Excruciatingly so. And this is what it looks like.

The 2020 Summer Olympics will be held in Japan. And when the prime minister of Japan, Shinzo Abe, made this public at the 2016 Olympics in Rio de Janeiro, Brazil, he did so in an interesting way. He was standing atop a giant “warp pipe” dressed as Super Mario. I’m trying to imagine the U.S. equivalent. Can you imagine the president of the United States standing atop the golden arches, dressed as Ronald McDonald, telling the world that we’d be hosting some international event?

Prime minister Abe was able to do this because Mario is a cultural icon recognized around the world. That Italian-American plumber from Brooklyn created in Japan is truly a global citizen. The Economist recently published an essay on how Mario became known around the world.

Mario is a great example of a process sociologists call cultural globalization. This is a more general social process whereby ideas, meanings, and values are shared on a global level in a way that intensifies social relations. And Japan’s prime minister knew this. Shinzo Abe didn’t dress as Mario to simply sell more Nintendo games. I’m sure it didn’t hurt sales. In fact, in the past decade alone, Super Mario may account for up to one third of the software sales by Nintendo. More than 500 million copies of games in which Mario is featured circulate worldwide. But, Japan selected Mario because he’s an illustration of technological and artistic innovations for which the Japanese economy is internationally known. And beyond this, Mario is also an identity known around the world because of his simple association with the same human sentiment—joy. He intensifies our connections to one another. You can imagine people at the ceremony in Rio de Janeiro laughing along with audience members from different countries who might not speak the same language, but were able to point, smile, and share a moment together during the prime minister’s performance. A short, pudgy, mustached, working-class, Italian-American character is a small representation of that shared sentiment and pursuit. This intensification of human connection, however, comes at a cost.

We may be more connected through Mario, but that connection takes place within a global capitalist economy. In fact, Wisecrack produced a great short animation using Mario to explain Marxism and the inequalities Marx saw as inherent within capitalist economies. Cultural globalization has more sinister sides as well, as it also has to do with global cultural hegemony. Local culture is increasingly swallowed up. We may very well be more internationally connected. But the objects and ideas that get disseminated are not disseminated on an equal playing field. And while the smiles we all share when we connect with Mario and his antics are similar, the political and economic benefits associated with those shared smirks are not equally distributed around the world. Indeed, the character of Mario is partially so well-known because he happened to be created in a nation with a dominant capitalist economy. Add to that that the character himself hails from another globally dominant nation–the U.S. The culture in which he emerged made his a story we’d all be much more likely to hear.

Defenders of capitalism in the United States often choose not to use that term when naming our system, preferring instead the phrase “market system.” Market system sounds so much better, evoking notions of fair and mutually beneficial trades, equality, and so on. The use of that term draws attention away from the actual workings of our system.

In brief, capitalism is a system structured by the private ownership of productive assets and driven by the actions of those who seek to maximize the private profits of the owners. Such an understanding immediately raises questions about how some people and not others come to own productive wealth and the broader social consequences of their pursuit of profit.

Those are important questions because it is increasingly apparent that while capitalism continues to produce substantial benefits for the largest asset owners, those benefits have increasingly been secured through the promotion of policies – globalization, financialization, privatization of state services, tax cuts, attacks on social programs and unions – that have both lowered overall growth and left large numbers of people barely holding the line, if not actually worse off.

The following two figures come from a Washington Postarticle by Jared Bernstein in which he summarizes the work of Thomas Piketty, Emmanuel Saez and Gabriel Zucman. The first set of bars shows the significant decline in US pre-tax income growth. In the first period (1946-1980), pre-tax income grew by 95 percent. In the second (1980-2014), it grew by only 61 percent.

This figure also shows that this slower pre-tax income growth has not been a problem for those at the top of the income distribution. Those at the top more than compensated for the decline by capturing a far greater share of income growth than in the past. In fact, those in the bottom 50 percent of the population gained almost nothing over the period 1980 to 2014.

The next figure helps us see that the growth in inequality has been far more damaging to the well-being of the bottom half than the slowdown in overall income growth. As Bernstein explains:

The bottom [blue] line in the next figure shows actual pretax income for adults in the bottom half of the income scale. The top [red] line asks how these folks would have done if their income had grown at the average rate from the earlier, faster-growth period. The middle [green] line asks how they would have done if they experienced the slower, average growth of the post-1980 period.

The difference between the top two lines is the price these bottom-half adults paid because of slower growth. The larger gap between the middle and bottom line shows the price they paid from doing much worse than average, i.e., inequality… That explains about two-thirds of the difference in endpoints. Slower growth hurt these families’ income gains, but inequality hurt them more.

A New York Timesanalysis of pre-tax income distribution over the period 1974 to 2014 reinforces this conclusion about the importance of inequality. As we can see in the figure below, the top 1 percent and bottom 50 percent have basically changed places in terms of their relative shares of national income.

The steady ratcheting down in majority well-being is perhaps best captured by studies designed to estimate the probability of children making more money than their parents, an outcome that was the expectation for many decades and that underpinned the notion of “the American dream.”

Such research is quite challenging, as David Leonhardt explains in a New York Timesarticle, “because it requires tracking individual families over time rather than (as most economic statistics do) taking one-time snapshots of the country.” However, thanks to newly accessible tax records that go back decades, economists have been able to estimate this probability and how it has changed over time.

Leonhardt summarizes the work of one of the most important recent studies, that done by economists associated with the Equality of Opportunity Project. In summary terms, those economists found that a child born into the average American household in 1940 had a 92 percent chance of making more than their parents. This falls to 79 percent for a child born in 1950, 62 percent for a child born in 1960, 61 percent for a child born in 1970, and only 50 percent for a child born in 1980.

The figure below provides a more detailed look at the declining fortunes of most Americans. The horizontal access shows the income percentile a child is born into and the vertical access shows the probability of that child earning more than their parents. The drop-off for children born in 1960 and 1970 compared to the earlier decade is significant and is likely the result of the beginning effects of the changes in capitalist economic dynamics that started gathering force in the late 1970s, for example globalization, privatization, tax cuts, union busting, etc. The further drop-off for children born in 1980 speaks to the strengthening and consolidation of those dynamics.

The income trends highlighted in the figures above are clear and significant, and they point to the conclusion that unless we radically transform our capitalist system, which will require building a movement capable of challenging and overcoming the power of those who own and direct our economic processes, working people in the United States face the likelihood of an ever-worsening future.

Late last year Covergirl announced a new spokesmodel, a 17-year-old named James Charles. Their Instagram announcement currently boasts over 53,000 likes, though the comments on the post were decidedly mixed. They ranged from “I will never buy another (coverGIRL) because of this” to “love love love” and “the world is coming to equality and acceptingness.”

A photo posted by COVERGIRL (@covergirl) on Oct 11, 2016 at 7:03am PDT

In my circles, the overwhelming response was enthusiasm. Charles’ ascendance to Covergirl status was evidence that gender flexibility was going mainstream. And, I suppose it is.

I am always suspicious, though, of corporate motives. Covergirl’s decision to feature Charles does serve to break down the gender binary, but it does other things, too. Most notably, if makeup companies could convince boys and men that their product is as essential for them as it is for girls and women, it would literally double the size of their market.

That this hasn’t happened yet, in fact, is evidence of the triumph of gender ideology over capitalism. Either companies have decided that there’s (almost) no market in men or men have resisted what marketing has been applied. It’s an impressive resistance to what seems like an obvious expansion. There’s just no money in men thinking their faces look just fine as they are; the fact that we’ve allowed them to do so thus far is actually pretty surprising when you think about it.

If Covergirl had its way, though, I have no doubt that it would make every 17-year-old boy in America into a James Charles. Such a change would contribute to breaking down the gender binary, at least as we know it (though no doubt there are more and less feminist ways of doing this). Of course, if it was advantageous to do so, Covergirl would claim that it had something to do with feminism. But, I wouldn’t buy it.

Jason A. Smith on November 10, 2016

Last month one media behemoth, AT&T, stated it would purchase another, Time Warner, for $85.4 million. AT&T provides a telecommunications service, while Time Warner provides content. The merger represents just one more step in decades of media consolidation, the placing of control over media and media provision into fewer and fewer hands. This graphic, from the Wall Street Journal, illustrates the history of mergers for the latest companies to propose a merger:

The purchase raises several issues regarding consumer protections – particularly over privacy, competition, price hikes, and monopoly power in certain markets – and one of these is related to race.

A third of the American population identifies as Latino, African American, Asian American, and Native American, yet members of these groups own only 5% of television stations and 7% of radio stations. Large-scale mergers like the proposed one between AT&T and Time Warner exacerbate this exclusion. Minority-owned media companies tend to be smaller and mergers make it even harder to compete with larger and larger media conglomerates. As a result, minority-owned companies close or are sold and the barriers to entry get raised as well. The research is clear: media consolidation is bad for media diversity.

After the #OscarsSoWhite controversy, the Academy of Motion Picture Arts and Sciences committed to increasing diversity on screen and technology companies have vowed to increase their workforce diversity, but such commitments have done relatively little to improve representation. Such “gentlemen’s agreements” are largely voluntary and are mostly false promises for communities of color.

Advocacy groups and federal authorities should not rely on Memorandum of Understandings to advance inclusion goals. When the AT&T/Time Warner deal gets to the Federal Communications Commission, scrutiny in the name of “public interest” should include the issue of minorities’ inclusion in both the media and technology industries. As a diverse nation struggling with ongoing racial injustices, leaving underrepresented communities out of media merger debates is a disservice not only to those communities, but to us all.

Flashback Friday.

Previously marketed to women, skin lightening, bleaching, and “fairness” creams are being newly marketed to men. The introduction of a Facebook application has triggered a wave of commentary among American journalists and bloggers. The application, launched by Vaseline and aimed at men in India, smoothes out blotches and lightens the overall skin color of your profile photo, allowing men to present a more “radiant” face to their friends.

The U.S. commentary involves a great deal of hand-wringing over Indian preference for light skin and the lengths to which even men will go to get a few shades lighter. Indians, it is claimed, have a preference for light skin because skin color and caste are connected in the Indian imagination. Dating and career success, they say further, are linked to skin color. Perhaps, these sources admit, colorism in India is related to British colonialism and the importation of a color-based hierarchy; but that was then and, today, India embraces prejudice against dark-skinned people, thereby creating a market for these unsavory products.

The obsession with light skin, however, cannot be solely blamed on insecure individuals or a now internalized colorism imported from elsewhere a long time ago. Instead, a preference for white skin is being cultivated, today, by corporations seeking profit. Sociologist Evelyn Nakano Glenn documents the global business of skin lightening in her article, Yearning for Lightness. She argues that interest in the products is rising, especially in places where “…the influence of Western capitalism and culture are most prominent.” The success of these products, then, “cannot be seen as simply a legacy of colonialism.” Instead, it is being actively produced by giant multinational companies today.

The Facebook application is one example of this phenomenon. It does not simply reflect an interest in lighter skin; it very deliberately tells users that they need to “be prepared” to make a first impression and makes it very clear that skin blotches and overall darkness is undesirable and smooth, light-colored skin is ideal. Marketing for skin lightening products not only suggests that light skin is more attractive, it also links light skin to career success, overall upward mobility, and Westernization. Some advertising, for example, overtly links dark skin with saris and unemployment for women, while linking light skin with Western clothes and a career.

The desire for light skin, then, isn’t an “Indian problem” for which they should be entirely blamed. It is being encouraged by corporations who stand to profit from color-based anxieties that are overtly tied to the supposed superiority of Western culture. These corporations, it stands to be noted, are not Indian. They are largely Western: L’Oreal and Unilever are two of the biggest companies. The supposedly Indian preference for light skin, then, is being stoked and manufactured by companies based in countries populated primarily by light-skinned people. As Glenn explains, “Such advertisements can be seen as not simply responding to a preexisting need but actually creating a need by depicting having dark skin as a painful and depressing experience.”

Before pitying Indian seekers of light-skin, condemning the nation for colorism, or gently shaking our heads over the legacies of colonialism, we should consider how ongoing Western cultural dominance (that is, racism and colorism in the West today) and capitalist economic penetration (that is, profit through the cultivation of insecurities around the world) contributes to the global market in skin lightening products.

Philip N. Cohen PhD on August 1, 2016

It’s all harmless political shenanigans until a racist mob murders Vincent Chin.

It’s amazing how the new figureheads of both major parties are now pretending to oppose globalization, outsourcing, and the corporate “free trade” agenda that they both have spent their professional lives furthering. It wasn’t long ago that I taught in my stratification class that this agenda was the one thing we could be sure both parties and the big money behind them wouldn’t give up. Never say never, but I’m still pretty sure that’s still true.

There are humans that are hurt by this agenda, but most of them aren’t Americans. If politicians want to talk about slave labor, exploitation, and environmental degradation in the new manufacturing centers of the world, then I would be happy to listen to them talk about the harmful effects of those practices “here at home” too. But if they just want to bash China, then that’s racist, and no thank you.

Case in point, Pennsylvania Senator Bob Casey at the Democratic National Convention the other day. Here’s his speech, followed by some of the text and my comments:

Casey quoted his father, the former governor:

The sweat and blood of working men and women who built Pennsylvania forged the industrial revolution in our country, and outproduced the world.

How touching, attributing the industrial revolution the efforts of the working class and not the capitalists. It reminds me of when another Pennsylvania governor, Democrat Robert Pattison, reached across the aisle, helping out Republican industrialists by lending them the National Guard to attack striking steelworkers.

I assume today’s Democratic politician will now go on to recognize the working class of today’s manufacturing centers, who, through their sweat and blood, are outproducing the world and building the middle class in their countries. Oh right, Senator Casey is an American.

What about Donald Trump? Donald trump says he stands for workers, and that he’ll put American first, but that’s not how he’s conducted himself in business. Where are his, quote, tremendous products made? Dress shirts: Bangladesh. Furniture: Turkey. Picture frames: India. Wine glasses: Slovenia. Neckties: China. China! Why would Donald Trump make products in every corner of the world, but not in Altoona, Erie, or here in Philadelphia? Well, this is what he said, quote, outsourcing is not always a terrible thing. Wages in America quote, are too high. And then he complained about companies moving jobs overseas because, quote, we don’t make things anymore. Really? … [examples of stuff made in America]. Donald Trump hasn’t made a thing in his life, except a buck on the backs of working people. If he is a champion of working people, I’m the starting center for the 76ers! The man who wants to make America great, doesn’t make anything in America! If you believe that outsourcing has been good for working people, and has raised incomes for the middle class, then you should vote for Donald Trump. … We need to making good paying jobs for everyone here at home, so that everyone who works hard can get ahead and stay there.

The great conflict of our time is between “China” and “working people”? Maybe we should all link arms and together put down striking Chinese workers to keep the price down on our iPhones and Wal-Mart junk.

The Democratic National Convention was very on-message. In Hillary Clinton’s acceptance speech the next day, she said:

If you believe that we should say “no” to unfair trade deals, that we should stand up to China, that we should support our steelworkers and autoworkers and homegrown manufacturers — join us.

She gave no definition of what it means to “Stand up to China,” though her website says she will insist on trade deals that raise wages and create good-paying jobs (presumably in the US). That’s not important — the important thing communicated to her audience is she’s against China and for American workers. Then she went through the same list of Trump production locations that Casey did, before concluding, “Donald Trump says he wants to make America great again – well, he could start by actually making things in America again.” The current U.S. trade deficit in goods (as opposed to services) is about $62 billion — per month. Virtually all Americans are dependent on imported goods (including, apparently, Clinton, whose Nina McLemore suits are made from European and Asian fabrics). No major politician is seriously against this. Trump hiring U.S. workers to make his ties would make about as much difference as Clinton buying clothes with U.S. fabrics, which is basically none. It’s just symbolism, and the symbolism here is “China is bad.” Unless you join this kind of talk with explicit concern for the suffering and exploitation of Chinese workers, this just feeds American racism.

Decades later, Vincent Chin’s murder still resonates with me. There is debate about whether racism was the real motivation behind his murder, and it wasn’t as simple as a random lynch mob. Despite the legend, it is not the case that the auto workers just killed him because they falsely believed he was Japanese. But a witness at the bar said they blamed him for them being out of work before they fought. She said:

I turned around and I heard Mr. Ebens say something about the “little motherfuckers.” And Vincent said, “I’m not a little motherfucker,” and he said, “Well, I don’t know if you’re a big one or a little one.” Then he said something about, “Well, because of y’all motherfuckers we’re out of work.”

After losing the first round, Ronald Ebins and his stepson, Michael Nitz, hunted Chin down and killed him with a baseball bat, a crime for which they ultimately served no jail time.

My 8-year-old Chinese immigrant daughter, who learns all about how racism and bullying are bad and MLK is great in her neoliberal public American elementary school, is routinely offended and hurt by the China-bashing she hears from Democrats as well as Trump (she supported Bernie but is willing to back Hillary to stop Trump).

Hillary says we should protect our children from having to listen to Trump’s nastiness — she even has ad on that, which I’ve personally witness liberals tearing up over:

So, what about the people making speeches at the Democratic convention, spitting out the word China! like it’s a disease? “What example will we set for them?”

If the new normal of politics is both parties bashing foreigners while they pretend to oppose globalization — and then pursuing the same policies anyway (which, face it, you know they will), then what have we gained? It seems to me there is a small chance Clinton will negotiate better trade deals to the benefit of workers (U.S. or Chinese), alongside a much greater chance that her rhetoric will stoke nativism and racism. Trump’s megaphone may have drawn the White supremacists out from under their rocks, but the new anti-TPP Hillary is bellowing the same obnoxious chauvinism.